Apple Bruised by the Economy

Analysts cut ratings, trim estimates.

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Apple (AAPL) isn't immune to worries about consumer spending. With its shares off more than a third over the last month, and yesterday's 18 percent drop on this week's spate of new analyst downgrades, it looks like most parts of the business are feeling the pinch.

Here's a rundown of the latest analyst opinion:

Morgan Stanley: PC shipments show a shift to cheaper sub-$1,000 computers, away from Mac's higher price point. Some 70 percent of Mac sales are above $1,500. Lower iPhone and Mac orders were also a problem. Morgan cut its rating to equal weight from overweight.

RBC: Analyst Mike Abramsky cut his rating in part on a survey of tech buyers that showed a drop in the percentage of consumers who plan to buy a Mac laptop in the next 90 days. It's 29 percent vs. 34 percent in August. That's the biggest decline in more than two years. RBC cut its rating to sector perform from outperform and lowered its price target from $200 to $140.

Citigroup: Among the more bullish voices, analyst Richard Gardner cut estimates on weaker consumer spending despite expectations of "modest EPS growth and solid free cash flow growth in FY09 because of iPhone's deferred revenue accounting." He lowered his price target to $170 from $287.

Goldman Sachs: The pullback is overdone. "Broader concerns about softer consumer demand will continue to cause Apple shares to be volatile in the near term. However, the recent sell-off creates an opportunity as we think Apple will outperform our group through the end of the year, driven by iPhone unit upside and a strong product pipeline." Goldman says yesterday's drop "more than captures the concerns about Mac growth in a weakening spending environment, making Apple shares attractive at current levels." Analysts say shares could rebound back to $145 in the "intermediate term." Price target $200.